In proceedings before the Missouri Public Service Commission, rates are set to give a utility company an opportunity, but not a guarantee, to earn a reasonable return on its investment after recovering its prudently incurred expenses.
It's the commission's job to set those rates, and it's Bob Schallenberg's job to make sure they have the information they need. As director of the Audits, Accounting & Financial Management Department, Schallenberg's staff not only perform audits and offer financial analysis, they also review "the books" kept by Missouri's regulated utilities. One of their key duties is to present their expert testimony and recommendations to the commissions, guidance that is then used to help the body set utility rates for the millions of utility consumer across the state.
With 37 years of experience at the PSC, he is one of the agency's longest-serving employees, overseeing about five other managers and 50 employees who provide expertise in the areas of utility accounting, auditing, engineering, finance, management and natural gas procurement.
If the devil is in the details, then Schallenberg is either a little bit of a devil or a little bit of an angel, depending on your perspective - because he's certainly spent his time and energies delving into how utilities operate.
Schallenberg grew up in Kansas City and Raytown, attending Archbishop O'Hara High School.
"It's the Helias of the Kansas City region," he explained.
After graduating, he had opportunities to play both basketball and football at the college level. He chose to play football - as a tight end and outside linebacker - for St. Mary of the Plains College in Dodge City. He also attended the University of Missouri-Kansas City, earning a bachelor's degree in business with a emphasis in accounting.
He is a certified public accountant who actually wanted to be lawyer when he was younger. But life circumstances demanded that he work full time and when the PSC called with a job offer in the Kansas City office, he took it. He started in November 1976 and - with the exception of a small stint elsewhere - has remained. After traveling back and forth to Jefferson City for many years, in the 1990s he moved here permanently.
He explained that what his office does is "audit the representations of the expenses of what the utility is claiming needs to be recovered in its rates." Unlike many accountants, PSC accountants - who are often caught between the desire of utility executives who want to maximize profits and consumer advocates who want to get the best deal for customers - expect to be challenged on their work. It doesn't hurt to develop a backbone and have a feisty personality, he said.
Sometimes the PSC regulators disagree with a utility's purchasing decisions - do corporate executives really need that jet? - and they also watch to ensure that utilities aren't allowing employees on the regulated (monopoly) end of their business to perform work for the unregulated side.
"It's a stressful environment. Some people thrive on it; some are not suited to it," he said. "You are always going to have someone disagreeing with you."
While accountants are often derided as "bean counters," Schallenberg said the work can be fascinating. He remembers the time when two Missouri telephone companies - the Cass County Telephone Company and New Florence Telephone Inc. - were infiltrated by New York mobsters who used the companies to commit fraud. After the investigations were over, the companies ended up paying thousands of dollars in fines and returned millions to ratepayers.
He noted that most of the fraud discovered by government regulators comes from disgruntled whistleblowers.
Schallenberg has two grown sons who live in Blue Springs and Denver, and five grandchildren.